Bombay HC Stays Attachment of Panvel Housing Complex, Providing Relief to Over 900 Flat Owners

In a recent ruling, the Bombay High Court granted relief to more than 900 flat owners by staying the attachment of a housing project in Panvel developed by builder Lalit Tekchandani. The project had been under investigation under the Maharashtra Protection of Interests of Depositors (MPID) Act, with allegations that Tekchandani had misused funds meant for the flat owners.

The case revolves around a Panvel-based housing project developed by Supreme Developers and Construction Pvt Ltd (SDCPL), a firm owned by Tekchandani. The Enforcement Directorate had attached the properties of Tekchandani and his firm in April, as part of an ongoing investigation into alleged financial mismanagement. The allegations suggest that Tekchandani had siphoned off funds belonging to the flat owners. In March, Tekchandani was arrested after a probe was launched into his financial activities.

The flat owners, many of whom had invested their life savings into the project, were left distressed by the developments. Among them, the Clan City Welfare Association, which consists of 157 flat owners, filed a petition in the Bombay High Court. They sought to have the attachment lifted and requested that the project be completed either through a government agency or a court-monitored committee. The petition claimed that the builder had misappropriated funds from nearly 1,700 flat owners, accumulating over ₹400 crore in unauthorized amounts.

In its ruling, a bench comprising Justices Ajey Gadkari and Kamal Khata issued a stay on the attachment, specifying the systematic nature of the misappropriation that impacted hundreds of middle-income flat buyers. The judges highlighted the unfortunate situation faced by the 900 flat owners, many of whom had been misled by the builder under the false assurance of acquiring homes. The court asso acknowledged the scale of the financial and emotional burden imposed on these buyers, who had been waiting for years for possession of their flats.

According to the petition, the project received its first commencement certificate in 2010. Over the next 14 years, the flat owners, many of whom had taken loans to fund their purchases, continued to pay off interest and principal to banks and financial institutions. However, despite these payments, only a fraction of the promised work was completed, with the builder failing to hand over the flats.

The builder had initially assured the owners that the project, which consisted of 13 buildings, would be completed by March 2023. However, the petition claims that as of now, only 70% of the work has been finished. Furthermore, flat purchasers were required to pay booking amounts ranging from ₹32,000 to ₹53,000. In some cases, they were pressured into paying additional sums while being issued a letter of intent, which set harsh terms for future dealings. The petition also highlights the unfair terms imposed through a letter of reservation, which stripped owners of their rights over the flats, leaving them no choice but to pay more without any guarantee of receiving possession.

While staying the attachment, the court expressed concern for the flat owners, many of whom had paid substantial amounts for their flats, sometimes up to 90% of the total price. The flat owners' dreams of owning homes were shattered by the alleged financial mismanagement of Tekchandani and his firm. The court's decision brings hope to these owners, offering a chance to finally secure the homes they have long awaited.

The stay order marks an important moment in the case, providing the flat owners with much-needed relief as they await a resolution. It remains to be seen how the matter will progress and whether the project will eventually be completed or further legal steps will be needed to ensure the buyers receive the homes they were promised.